Spain's Beckham Law: requirements, deadlines and what it actually saves you

Spain's Beckham Law: requirements, deadlines and what it actually saves you

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Moving to Spain for work raises one question very quickly: how much tax will you actually pay. For a lot of expats, the answer depends on a single regime — the impatriate regime, better known as the Beckham Law.

The mechanism is simple: instead of being taxed as a Spanish resident on your worldwide income, you are taxed like a non-resident on the income you earn in Spain, at a fixed rate of 24% up to 600,000 euros with 47 percent applying beyond that threshold. For higher earners, the difference is substantial.

The conditions are strict. In broad terms, you must have been non-resident in Spain for the previous five tax years, the move has to be tied to a job offer, a posting or a company directorship, and the work must be carried out mainly in Spain. The latest changes opened the door to remote workers and certain entrepreneurs.

Timing is the part people get wrong. The election must be filed within six months of starting the activity that triggers residence. Miss it and the regime is lost for the whole assignment. The benefit then runs for a total of six tax years.

It is not automatically the better option. If you have significant income outside Spain, the effect on wealth tax and on the 720 declaration should be calculated before deciding. Running web the numbers in advance is usually time well spent.

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